Genghis Capital - UAP Holdings Ltd (NSE: UAPHL) 1H18 Earnings Note

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Genghis Capital

Elizabeth Ndungu

EUR 25.77 For Business Accounts Only

UAP Holdings Ltd (NSE: UAPHL) 1H18 Earnings Note

UAP Holdings Ltd. (NSE: UAPHL) released 1HY18 financials, reporting a 77.1% y/y decline in EPS to KES 0.49 from KES 2.14 in 1H17. This was attributed to; 1) a one off reorganization cost totaling KES 335.12Mn, 2) a 6.6% y/y decline in Gross earned premiums (GEP) and 3) a 57.2% rise in income tax expense. Profit before tax excluding the reorganization cost grew by 14.5% from KES 681.8Mn to KES 780.7Mn in 1H18. Investment income was up 11.0% y/y at KES 2.0Bn, driven by an uplift in the fixed income market and an increase in rental income from investment property. Net claims grew 4.3% y/y to KES 5.2Bn primarily due to more conservative reserving, while operating expenses were muted at KES 2.4Bn (-0.4% y/y) on account of cost containment measures. We recommend a HOLD on the counter. The company trades at a P/B of 1.9x against the sector median P/B of 1.2x. The return on equity (ROE) stands at 5.1% against an industry median of 11.6%.

28/08/2018 6 EN

Provider

Genghis Capital

Genghis Capital is an innovative and customer focused Investment Bank licensed by the Capital Markets Authority (CMA). Founded in 2008, Genghis is one of the leading investment banks in Kenya. Since its establishment, Genghis has achieved tremendous growth to offer a well-diversified portfolio of financial services that includes:

i. Securities(Equity/Debt) Trading
ii. Research
iii. Wealth Management services
iv. Investment Advisory & Management via the GenCap Unit Trusts
v. Corporate Finance & Transaction Advisory services

The Kenyan Capital Markets continue to develop in size, scope and sophistication. With this is an increasing demand for more specialized and personalized brokerage service and we at Genghis Capital are glad to be able to offer you this service. Our strength lies in ensuring our clients are up to speed with developments at the stock market and the economy. Research and technology remains our competitive and comparative advantage hence Experience, Expertise and Professionalism are some of the qualities you can expect from our team.

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Analysts

Elizabeth Ndungu

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UAP Holdings Ltd (NSE: UAPHL) 1H18 Earnings Note

Genghis Cross-Asset Weekly Strategy - 8th February 2021

East African Breweries Ltd (NSE: EABL) 1H21 Earnings Note

KenGen Company Plc (NSE: KEGN) FY20 Earnings Note

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